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Sunday February 25th, 2024

Sri Lanka’s progress on GSP+ commitments: top EU officials says report due soon

ECONOMYNEXT – The European Union will assess progress made on Sri Lanka’s commitments for the 500 million US dollar GSP+ trade concession “very soon”, with a report due to be released later this year or early 2023, European Commission President Ursula von der Leyen has said.

Sri Lanka President Ranil Wickremesinghe’s office said Monday October 03 morning that von der Leyen had made this reference to the EU’s assessment of Sri Lanka’s commitments in a statement she had made on Sri Lanka.

Sri Lanka’s access to the Generalised Scheme of Preferences Plus (GSP+) concession has been under review for extension as the country failed to adhere to several of the commitments it had made, mainly with regard to human rights.

GSP+ is an annual trade concession worth over 500 million US dollars which has boosted Sri Lanka’s exports to EU member states over the years mainly in the garments sector, a top forex earner for the island nation.

The president’s media division (PMD) said that von der Leyen had congratulated President Wickremesinghe on his election and has assured the EU’s support to the government of Sri Lanka for its efforts to successfully overcome the country’s prevailing currency crisis.

According to the PMD, the EU commission chief’s statement has said that, at a time of unprecedented challenges faced by the people of Sri Lanka, the European Union remains committed to support Sri Lanka’s efforts to overcome the crisis successfully, including the necessary reforms that will bring the country back to a path of inclusive prosperity and lasting national reconciliation.

She had said that, this process, freedom of expression and assembly, dialogue among all stakeholders, as well as respect for the rule of law and fundamental rights will remain essential.

The EU has stressed on several occasions that Sri Lanka needs to uphold its commitments, particularly with regard to eradicating human rights violations in the country. Of particular concern to the EU has been Sri Lanka’s controversial Prevention of Terrorism Act (PTA), an anti-terror law that critics have called draconian.

In June 2021, the European parliament adopted a resolution calling for the repeal  of the PTA and inviting the EU Commission to consider temporarily withdrawing Sri Lanka’s access to GSP+.

More recently, a spate of arrests of anti-government protestors by police since the election of President Wickremesinghe has drawn international criticism, especially with regard to the detention of three activists under provisions of the PTA. The government, however, maintains that all arrests so far have been legal and were of individuals accused of offences such as damaging public property.

The PMD statement said von der Leyen had “commended the success in the efforts to introduce and steer policies that will ensure the short and long-term interests of all Sri Lankans and address the devastating efforts of the unprecedented economic downturn as well as the negotiations with international financial institutions and creditors.”

She has also expressed an interest in working closely to strengthen further the ties and cooperation, based on commitments to shared values and common interests, the statement said.

In August, British High Commissioner to Sri Lanka Sarah Hulton said Sri Lanka will benefit from the UK’s new trade concessionary scheme Developing Countries Trading Scheme (DCTS) that will replace the GSP+ in that country and will be in force from 2023.


Sri Lanka to benefit from access to UK’s new trading scheme: high commissioner


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Sri Lanka could get US$500mn from ADB in 2024

ECONOMYNEXT – Sri Lanka could receive 500 million US dollars in support from the Asian Development Bank in 2024 based on the progress of policy reforms, Country Director of the Manila-based lender, Takafumi Kadono said.

The ADB expect to go to its Board around March or April with a 100 million US dollar power sector loan subject to the cabinet of ministers of approving a revised electricity reform bill.

A 100 million dollar loan to support SMEs could also be approved in the early part of the year. Sri Lanka is setting up a credit guarantee agency to support credit for small firms.

A 200 million dollar credit for financial sector was also slated for the year. The ADB gave the first tranche of the financial sector policy loan late last year.

A $100mn for the water sector could also be approved later in the year.

Sri Lanka could get around 200 to 300 million US dollars a year at the lowest rate, or concessional ordinary capital resources (COL) rate of 2 percent.

The balance of would come at the ordinary capital resource rate linked to SOFR.

The ADB has also started work on a ‘Country Partnership Strategy’ for Sri Lanka covering the 2024-2028 period, Kadodo said. (Colombo/Feb25/2024)

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Sri Lanka’s multi-aligned foreign policy based on friendship: Min

ECONOMYNEXT – Sri Lanka’s multi-aligned foreign policy is based on friendship to all and enmity to none, its Minister of Foreign Affairs has said.

“Non-alignment means not becoming a bystander. Non-alignment means you are not forced or coerced into a camp to take sovereign decisions… you make your own choices. Whether it is commercial, security, regional or otherwise,” M U M Ali Sabry said on X (twitter).

“I have repeatedly stressed that sovereignty is the right to have your own opinion on what’s right and wrong, and to stand by your principles. Our multi-aligned foreign policy is based on friendship to all and enmity to none,” Sabry was quoting from his speech at the Lakshman Kadirgamar Institute of International Relations and Strategic Studies (LKI) Foreign Policy Forum, on the theme ‘Reassessing Non-Alignment in a Polarised World’.

Sri Lanka is one of the founding members of the Non-Aligned Movement.

The strategically located island has been increasingly walking a fine line between opposing global factions as it seeks to come out of a financial crisis. (Colombo/Feb24/2024)

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Sri Lanka’s Commercial Bank Dec net down on tax provisions

ECONOMYNEXT – Sri Lanka’s Commercial Bank of Ceylon reported profits of 6.9 billion rupees from the December 2023 quarter down 21 percent, despite an improvement in net interest income and lower provisions, amid a change in tax provisions.

Pre-tax profits were 8.89 billion rupees up from 2.4 billion rupees. There was a 6.4 billion tax reversal last year compared to a 1.7 billion rupee tax charge this year.

Commercial Bank reported earnings of 5.26 rupees for the quarter. For the year to December 2023 earnings were 16.07 rupees per share on total profits of 21.1 billion rupees, down 11.3 percent.

Net fee and commission income was down 1.2 percent to 6.1 billion rupees.

Net interest income went up 16.8 percent to 25.5 billion rupees, with interest income rising marginally by 1.3 percent to 73.0 billion rupees and interest expense falling 5.45 percent to 47.5 billion rupees.

Loans and advances to customers grew 4.06 percent to 1.17 billion rupees in the year to December. Debt and other financial instruments fell 10.5 percent to 649 billion rupees.

Financial assets measured and fair value through other comprehensive income was at 287 billion rupees, up from 117 billion rupees.

Impairment charges were 13.1 billion rupees, down from 19.6 billion rupees last year.

Gross assets were up 6.45 percent to 2.36 billion rupees. Net assets were up 5.51 percent to 214 billion rupees. (Colombo/Feb24/2024)

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